A New Storm Threatens Utilities

High valuations, lowered yields could lead investors to turn to other sectors.

By

Kopin Tan

November 3, 2012

By

Kopin Tan

November 3, 2012

Let's be clear: This isn't a reflexive rant because I have had to live, like hundreds of thousands in lower Manhattan, without power and water for days. It isn't even the wicked irony of having to pay my monthly Con Edison bill by candlelight. But do utilities really deserve their hefty premiums in the stock market?

Power companies project such an aura of safety. They brag about paying a rich dividend in a world of low interest rates, and they boast captive customers who dependably pay their bills, month after month after...